June 9, 2020 / 2:34 PM / a month ago

VW CEO apologises after row with supervisory board

FRANKFURT (Reuters) - Volkswagen CEO Herbert Diess has apologised to the carmaker’s supervisory board after accusing some of its members of leaking confidential information to the press.

FILE PHOTO: Volkswagen Group CEO Herbert Diess attends a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai, China November 8, 2019. REUTERS/Aly Song/File photo

The German company said on Tuesday that Diess had apologised to the 19-member board for making “inappropriate and wrong” statements at an internal event, without giving details.

A spokesman for Porsche Automobil Holding SE, the holding company of the Piech and Porsche families that controls Volkswagen, said Diess told an internal meeting that members of the supervisory board’s executive committee had leaked information to the media, calling such actions “crimes.”

The CEO’s comments on Thursday were seen as an attack on the company’s directors, prompting the supervisory board to convene an extraordinary meeting on Monday to discuss the matter, two sources familiar with the matter told Reuters.

The public announcement here of his apology amounts to a severe admonishment of Diess, who saw his responsibilities reduced on Monday after infighting over the pace and scope of cost-cutting plans.

“The members of the Supervisory Board accepted the apology of Dr. Diess, and will continue to support him in his work,” the board said in a brief statement.

The two sources told Reuters that Diess’s accusations came after Germany’s Manager Magazin reported he had sounded out labour chief Joerg Hofmann about extending his contract as CEO.

Hofmann, who is head of Germany’s largest union IG Metall, sits on the Volkswagen supervisory board’s executive committee. Volkswagen’s worker representatives control nine seats on the board, and have the power to veto contract extensions.

A spokesman for the supervisory board declined to comment on the details of the clash, apart from saying it was not related to a review into how the company came to publish a racist advert.

Spokespeople for Diess and Hofmann also declined to comment.

Volkswagen replaced Diess as the CEO of its main VW brand on Monday and installed chief operating officer Ralf Brandstaetter to lead cost cutting efforts at the company’s largest plants in Germany.

The carmaker employs 297,000 people in Germany, most of them at the VW brand. Its other brands include Audi, Bentley, Skoda, Lamborghini and Porsche.

Diess remains group CEO, a position he has held since 2018.

The incident appears to follow a pattern at the carmaker where board members lose backing if their cost cutting and efficiency measures threaten too many local jobs, prompting the company’s powerful labour leaders to flex their muscles.

Bernd Pischetsrieder, Volkswagen CEO from 2002-2006, and Wolfgang Bernhard, VW brand chief from 2005-2007 were forced out of their jobs after repeated clashes with VW’s works council.

Reporting by Jan Schwartz and Ilona Wissenbach and Edward Taylor, writing by Edward Taylor, editing by Keith Weir and Mark Potter

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